Rebooting India: Tranche 2 of the Finance Ministry’s Blueprint

While the Finance Minister Nirmala Sitharaman, on Wednesday, unveiled the first tranche of the mega economic package aimed at uplifting the economy battered by the nationwide lockdown to combat the spread of coronavirus disease. Today, the Finance Minister announced the next set of measures under Rs 20 lakh crore Atmanirbhar Bharat Abhiyan economic package.

Rebooting India

A total of nine major announcements were made under the second tranche. The announcements were focused on migrant workers, street vendors, small traders, small farmers, and self-employed people. The measures announced today are as follows:

1. Free food grain supply to migrants for 2 months: The Finance Minister Nirmala Sitharaman announced that the government will provide free food grains to the migrants in various states. According to the data, about 8 crore migrants are expected to benefit and the government will also spend up to Rs 3,500 crore for this intervention. The state governments will be responsible for the implementation and distribution of these food grains.

2. Enabling migrants to use Ration Card anywhere in the country: The FM mentioned that technology systems will be used to enable migrants to access the public distribution system for buying ration at any fair price shop in India. She added that 67 crore citizens in 23 states, or 83 percent of the PDS population, will benefit from this measure by August 2020.

3. Affordable rental accommodation for the urban poor: The FM added that the government will launch a scheme for affordable rental housing complexes under the Prime Minister’s Awas Yojana for migrant labourers and urban poor. Under this measure, the government will incentivize manufacturing units, industries, and institutions to develop and operate such affordable complexes on their private land. The Centre will also incentivize state government agencies similarly.

4. Interest subvention for MUDRA-Shishu Loans: It has also been announced that prompt payees under the MUDRA-Shishu loan scheme will be given an interest subvention of 2 percent for a period of 12 months. This, coupled with the RBI’s loan moratorium, will give them a relief of up to Rs 1,500 crore, the Finance Minister said.

5. Special credit facility for street vendors: The government will also launch a special scheme within a month to facilitate easy access to credit for street vendors. This measure will provide an initial working capital of up to Rs 10,000 to restart their businesses which have been adversely impacted due to the Coronavirus pandemic lockdown. This is expected to support 50 lakh street vendors and will provide liquidity of up to Rs 5,000 crore, Sitharaman said.

6. Extending credit-linked subsidy scheme on Home Loans: The credit linked subsidy scheme for those people earning between Rs 6-18 lakh annually has now been extended from March 2020 to March 2021. The scheme provides a subsidy to middle-income earners on affordable home loan interest rates. Earlier, almost 3.3 lakh families have benefited from this scheme and the extension will benefit another 2.5 lakh middle income families.

7. The government will use CAMPA funds of Rs 6,000 crore to push employment: Sitharaman said that the Rs 6,000 crore lying in the Compensatory Afforestation Fund will be used to push employment opportunities in urban, semi-urban and rural areas. This measure will help create job opportunities for tribals and adivasis.

8. Additional Rs 30,000 crore to be provided for crop loans through NABARD: The FM said that the government will give Rs 30,000 crore as additional emergency working capital for farmers through the National Bank for Agriculture and Rural Development. These additional funds will help up to 3 crore small and marginal farmers.

9. Concessional credit of up to Rs 2 lakh crore for Kisan Credit Card holders: The last measure for the second tranche announced today was that a special drive will be undertaken to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards. Up to 2.5 crore farmers will be covered under this measure and will benefit from a credit flow of about Rs 2 lakh crore.